Crystal Clear Company Purchases 50,000 Gallons of Distilled Water Each

question 164

Multiple Choice

Crystal Clear Company purchases 50,000 gallons of distilled water each year.Ordering costs are $100 per order,and the carrying cost,as a percentage of inventory value,is 80 percent.The purchase price to CCC is $0.50 per gallon.Management currently orders the EOQ each time an order is placed.The supplier is now offering a quantity discount of $0.03 per gallon if CCC orders 10,000 gallons at a time.Should CCC take the discount?

• A) From a cost standpoint,CCC is indifferent.
• B) No,the cost exceeds the benefit by $500.
• C) No,the cost exceeds the benefit by $1,000.
• D) Yes,the benefit exceeds the cost by $500.
• E) Yes,the benefit exceeds the cost by $1,120.

---

Definitions:

Body Language

Non-verbal communication through gestures, postures, and facial expressions that convey messages or emotions.

Purchase Decision

The process that leads a consumer to buy a product or service, influenced by factors such as marketing, personal preferences, and socioeconomic status.

Inbound Marketing

A strategy that focuses on attracting customers through content and interactions that are relevant and helpful, not interruptive.

Outbound Marketing

Outbound marketing is a traditional form of marketing that involves pushing messages out to a potential audience, such as through television ads, print ads, or cold calling.